>>OK, as long as I can bill as an individual, and take care of taxes next spring, all's fine.
>
>Normally, as an independent you have to pay your taxes quarterly and forecast ahead (pay taxes based on expectation). If at the end of the year you underpay, then there can be a substantial pentality for underpayment during the year -- the IRS wants their money now. I would recommend talking to a tax accountant to ensure you don't have to pay pentalities.

Thanks for the advice - I guess first couple of quarters may be quite unpredictable, so the tax may be anybody's guess. But then it's better to avoid penalties - it's just a cost. Are penalties tax deductible? :)